Sangam India Q1 FY26 Results (NSE: SANGAMIND)
Signal: Margin expansion
The read
Q1FY26 marks a sharp profit inflection: consolidated PAT ₹41 Cr vs ₹2.1 Cr YoY, on revenue growth of 8.9%, driven by operating leverage (EBITDA +109%), lower depreciation (revised useful lives), and stable finance costs. The company also announced a ₹1,500 Cr capex plan over three years and a promoter warrant issue of ₹100 Cr — signalling confidence in demand. Margins expanded 480bps YoY to ~10% EBITDA, though gross margin (ex-power) contracted 350bps due to higher raw material costs. The capex plan adds 64% more spindles and new garmenting capacity, targeting completion by Mar'29.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹860.35 Cr | 8.9% | -2.7% |
| EBIT | ₹84.98 Cr | 18.7% | |
| Net profit | ₹41.02 Cr | 1825.4% | |
| EPS | ₹8.16 | 1842.9% | |
| EBIT margin | 10.2% |
P&L walk
Revenue growth of 8.9% YoY combined with operating leverage (EBITDA +109% YoY) drove PAT surge to ₹41 Cr from ₹2.1 Cr; margin expansion was broad-based despite higher input costs.
Key positives
- Consolidated PAT surged to ₹41 Cr vs ₹2.1 Cr YoY, a 1825% increase — the highest quarterly profit in recent cycles.
- EBITDA margin expanded 480bps YoY to ~10%, underpinned by lower depreciation and finance cost leverage.
- Board approved ₹1,500 Cr capex for capacity expansion across yarn, denim, garmenting, and recycled polyester — to be completed by Mar'29.
- Promoter warrant issue of up to ₹100 Cr (18 lakh warrants at ₹555.56) underscores promoter confidence and will reduce debt post-conversion.
- Depreciation declined 28.5% YoY due to revised useful lives of assets, contributing to higher reported profit.
Key concerns
- Input cost pressure: cost of materials consumed rose to 57.7% of revenue from 55.6% YoY; power & fuel cost rose to 10.3% from 8.7%, compressing gross margin by 350bps.
- Sequential revenue decline of 2.7% QoQ from Q4FY26 — demand may have softened post year-end.
- Exceptional items (sweat equity) of ₹1.66 Cr recurring each quarter, not truly exceptional.
- EPS comparison with prior year is distorted by the revised useful lives of assets (depreciation not comparable).
Research and educational content only. Not investment advice.